Maximizing Annual Revenue by Combining Vacation Rentals with Monthly Apartments

The Core Strategy: Maximizing Revenue by Combining Minpaku with Monthly Rentals

Operating a property as both a minpaku (short-term vacation rental) and a monthly rental apartment is a powerful method for stabilizing and maximizing income throughout the year. Minpaku can command high nightly rates during peak seasons, but it carries the risk of steep occupancy drops during off-peak periods. By switching to a mid-to-long-term monthly rental model during slow seasons, owners can fill those vacancy gaps and boost overall annual revenue.

This hybrid approach is often called the “dual-season model” and has been gaining attention among real estate investors and property owners. For example, even a property with a minpaku occupancy rate of only around 60% for the year can achieve a combined annual occupancy of 90% or more by allocating the remaining 40% of the year to monthly rentals. The key isn’t just avoiding vacancy—it’s strategically leveraging the strengths of each operating model depending on the season.

In this article, we’ll explain in detail how to maximize revenue by combining minpaku and monthly rental operations, complete with concrete numerical examples and operational considerations. Whether you’re just starting to explore property management options or already running a minpaku business but struggling to grow your revenue, you’ll find practical insights here.

Why Minpaku Alone Often Struggles to Deliver Strong Annual Returns

The Gap Between Peak and Off-Peak Occupancy

The biggest challenge in minpaku operation is the significant seasonal swing in demand. During peak seasons—such as cherry blossom season, summer vacation, and the New Year holidays—occupancy can exceed 90%, with nightly rates sometimes jumping to 1.5 to 2 times the usual price. On the other hand, during off-peak periods such as mid-January through February, the rainy season in June, and November, occupancy can drop to as low as 30–40%.

For example, imagine a property with a nightly rate of ¥10,000. During four peak months with 85% occupancy, monthly revenue would be roughly ¥255,000. But during four off-peak months with only 35% occupancy, monthly revenue would drop to around ¥105,000. Since fixed costs—rent, utilities, cleaning fees—continue every month regardless of occupancy, there’s a real risk of running at a loss during the off-season.

The 180-Day Annual Cap Under the Minpaku Business Act

Properties registered under Japan’s Minpaku Business Act (the Private Lodging Business Act) are legally limited to a maximum of 180 operating days per year. In other words, a property can only function as a minpaku for roughly half the year. Even if you achieve full occupancy for all 180 days at an average nightly rate of ¥12,000, your maximum annual revenue would be capped at ¥2.16 million. If the remaining 185 days generate no income at all, your overall investment efficiency drops sharply.

Precisely because of this 180-day cap, how you use the remaining period becomes the decisive factor in your overall profitability. Operating the property as a monthly rental during that downtime is one of the most practical ways to monetize this otherwise idle period.

Why Monthly Rentals Fill the Off-Season Revenue Gap

Securing Stable Monthly Income

A monthly rental apartment is leased to tenants for a term of one month or longer. Unlike standard long-term leases, these units come furnished and equipped, allowing for short-term contracts that appeal to a wide range of tenants—business travelers, trainees, remote workers, and people needing temporary housing during a move. Monthly rents typically run 1.2 to 1.8 times higher than standard long-term leases. For instance, a studio apartment that would normally rent for ¥80,000 a month could be priced at ¥100,000–¥140,000 as a monthly rental.

Even during minpaku’s slow months of January through March, there’s steady demand tied to corporate relocation season and temporary housing needs ahead of the new fiscal year. Similarly, during low-demand months like June and November, business travel and extended-stay needs remain fairly consistent—directly helping to boost overall occupancy.

Lower Operating Costs

In minpaku operations, every guest turnover incurs cleaning fees (roughly ¥3,000–¥8,000 per visit), linen replacement costs, and expenses for restocking consumables. If you host 15 guest groups in a month, cleaning costs alone can reach ¥45,000–¥120,000. In contrast, with monthly rentals, since tenants stay for one month or longer, cleaning is only needed at move-in and move-out—dramatically reducing operating costs.

Guest-related tasks also decrease significantly. Minpaku requires daily check-in support, inquiry responses, and review management, but with monthly rentals, most of the work is concentrated around the signing and termination of the lease, greatly reducing the operational burden. This trade-off—lower revenue but higher profit margins—is one of the biggest advantages of the combined operating model.

How to Structure Your Annual Schedule

Capture High Rates with Minpaku During Peak Season

When building your annual schedule, start by securing the periods when minpaku can generate the highest returns. Peak seasons typically include late March through April (cherry blossom season), July through August (summer vacation), October (autumn foliage season), and late December through early January (New Year holidays). Combined, these four periods add up to roughly 5–6 months—which conveniently uses up nearly the entire 180-day limit under the Minpaku Business Act.

Because bookings tend to fill up easily even at 1.5 to 2 times the off-season rate, using dynamic pricing during peak periods is an effective way to maximize revenue. For example, a strategy of pricing a room at ¥8,000/night during the off-season, ¥15,000/night during cherry blossom season, and ¥18,000/night during the New Year holidays can work well.

Maintain Occupancy with Monthly Rentals During Off-Peak Season

During minpaku’s slow periods—mid-January through mid-March, May through June, September, and November—switch the property over to monthly rental operation. Since minpaku demand is weak during these months, it’s more rational to secure stable income through monthly contracts than to chase low-priced bookings.

For example, running a property as a monthly rental at ¥120,000/month for six off-peak months generates ¥720,000 in revenue. Operating the same period as minpaku at 40% occupancy and ¥8,000/night would yield only about ¥576,000. Monthly rental brings in roughly ¥144,000 more—and with significantly lower cleaning and guest-service costs, the actual profit gap is even wider.

Timing the Switchover and Minimizing Downtime

Switching between minpaku and monthly rental operation typically requires a 2–3 day gap for cleaning, maintenance, and equipment checks. To minimize this downtime, it’s important to plan the monthly tenant’s move-out date and the minpaku booking start date in advance.

In practice, it’s ideal to set the monthly lease’s end date about a week before peak season begins, using that window to complete professional cleaning and swap out furnishings. Keeping minpaku amenity kits (towels, shampoo, guidebooks, etc.) pre-assembled and stored in advance can allow you to complete the entire changeover in a single day.

Revenue Simulation: The Impact of the Combined Model

Annual Revenue: Minpaku Only

Let’s take a studio apartment in an urban area (¥100,000/month rent) as an example. Operating under the Minpaku Business Act for 180 days a year, with an average nightly rate of ¥12,000 and 75% occupancy, annual revenue would be: 180 days × 75% × ¥12,000 = ¥1.62 million. Subtracting annual rent of ¥1.2 million, cleaning fees (assuming ¥5,000 per turnover × approximately 90 turnovers) of ¥450,000, and consumables/utilities of ¥180,000, the net result is a loss of ¥210,000 for the year.

If the remaining 185 days sit completely vacant, fixed costs simply keep piling up—making it clear just how difficult it is to turn a profit with minpaku alone. While improving occupancy and rates further can help, given the structural 180-day cap, how you utilize the property’s downtime is ultimately the deciding factor.

Annual Revenue: Minpaku + Monthly Rental Combined

Using the same property, let’s operate it as minpaku for six peak months (about 180 days) and as a monthly rental (¥130,000/month) for the remaining six off-peak months. Minpaku revenue remains ¥1.62 million, as before. Monthly rental revenue comes to ¥130,000 × 6 months = ¥780,000. Combined revenue totals ¥2.4 million.

On the cost side: annual rent of ¥1.2 million, minpaku cleaning fees of ¥450,000, move-in/move-out cleaning for the monthly rental period (2 times × ¥15,000) of ¥30,000, and consumables/utilities of ¥200,000, for a total of ¥1.88 million. That leaves a net annual profit of roughly ¥520,000—a dramatic ¥730,000 improvement compared to the ¥210,000 loss under minpaku-only operation.

Legal Requirements and Operational Considerations

Legal Distinctions Between Minpaku Registration and Monthly Rental

If you plan to operate a property registered under the Minpaku Business Act as a monthly rental during off-peak periods, that monthly rental period falls under standard “lease agreement” law rather than the regulations of the Hotel Business Act or the Minpaku Business Act. However, you will need to execute a fixed-term lease agreement, so having proper contract documentation in place is essential.

Also be aware that some condominium management regulations prohibit minpaku operation altogether, and if you’re leasing the property rather than owning it, you may need the property owner’s consent. If you’re operating monthly rentals through a sublease arrangement, be sure to confirm that the original lease agreement includes a clause permitting subletting. Legal oversights can result in administrative guidance or business suspension, so we recommend consulting with a specialist beforehand.

Switching Fire Safety Equipment and Insurance Coverage

During periods when the property operates as minpaku, it must meet fire safety equipment standards under the Fire Service Act (automatic fire alarms, emergency lighting, etc.). During the monthly rental period, the property is treated as a standard residence, so these fire safety requirements are relaxed—though there’s no issue with leaving the equipment installed.

Fire insurance also requires attention. Coverage terms may differ depending on whether the property is classified as “commercial use” during the minpaku period or “residential lease use” during the monthly rental period. Either choose an insurance product that covers both operating modes throughout the year, or establish a workflow to notify your insurer each time you switch. If an accident occurs while your coverage doesn’t apply, you could be liable for damages amounting to millions of yen out of pocket.

Practical Techniques to Boost Revenue Even Further

Implementing Dynamic Pricing

To maximize revenue during minpaku periods, implementing a dynamic pricing tool that automatically adjusts nightly rates based on demand is highly effective. Tools like PriceLabs, Beyond Pricing, and Wheelhouse analyze pricing trends at nearby accommodations, local events, and day-of-week demand patterns to automatically set optimal rates. Some operators have reported revenue increases of 15–30% after adopting these tools.

Manually setting granular pricing—say, ¥9,000/night on weekdays, ¥13,000 on weekends, and ¥18,000 during major events—simply isn’t practical to do by hand. These tools typically cost ¥2,000–¥5,000 per month per property, but given the revenue gains from optimized pricing, the investment pays for itself many times over.

Diversifying Monthly Rental Booking Channels

To secure tenants for your monthly rental, it’s worth leveraging multiple platforms. In addition to listing on dedicated monthly rental portals (such as Good Monthly and Monthly Mansion Leopalace), directly pursuing corporate contracts can significantly boost occupancy.

Demand from corporate training programs and business travel is particularly stable, and once you land a corporate contract, you can typically expect repeat, ongoing use. Reaching out directly to nearby companies and staffing agencies—even offering a 10–15% monthly discount—is often well worth it given the value of eliminating vacancy risk entirely.

Contact Stay Buddy Inc. for Minpaku Management Support

Combining minpaku and monthly rental operations is an effective strategy for maximizing revenue, but successfully executing it requires substantial know-how across legal compliance, schedule management, pricing strategy, and booking channel development. Attempting to manage this on your own carries the risk that legal oversights or operational inefficiencies could eat into your profits.

Stay Buddy Inc. specializes in minpaku property management and helps owners maximize their property’s revenue potential. We can propose a comprehensive, year-round operating plan—covering everything from peak-season minpaku operation to the off-season switch to monthly rentals.

We offer one-stop support that includes simulating the optimal operating model based on your property’s location and characteristics, assisting with registration procedures, and handling cleaning and guest services on your behalf. If you’re wondering “Would this combined model work for my property?” or “How much revenue could I realistically expect?”—feel free to reach out to Stay Buddy Inc. anytime, even just to ask.